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Will China Tian Lun Gas Holdings Limited’s (HKG:1600) Earnings Grow In The Years Ahead?

Casey Hall

The latest earnings announcement China Tian Lun Gas Holdings Limited (HKG:1600) released in December 2017 showed that the business gained from a strong tailwind, leading to a double-digit earnings growth of 29.00%. Below, I’ve laid out key growth figures on how market analysts predict China Tian Lun Gas Holdings’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings. View out our latest analysis for China Tian Lun Gas Holdings

Market analysts’ consensus outlook for this coming year seems optimistic, with earnings growing by a robust 20.30%. This growth seems to continue into the following year with rates arriving at double digit 39.82% compared to today’s earnings, and finally hitting HK$633.44m by 2021.

SEHK:1600 Future Profit June 24th 18

While it is helpful to be aware of the rate of growth each year relative to today’s value, it may be more valuable to gauge the rate at which the business is rising or falling every year, on average. The benefit of this method is that we can get a bigger picture of the direction of China Tian Lun Gas Holdings’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I’ve appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 14.76%. This means, we can expect China Tian Lun Gas Holdings will grow its earnings by 14.76% every year for the next couple of years.

Next Steps:

For China Tian Lun Gas Holdings, there are three essential factors you should further examine:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is 1600 worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether 1600 is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 1600? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.